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Level 1 | Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to directly access. |
Level 2 | Valuations based on quoted prices for similar assets or liabilities; valuations for interest-bearing securities based on non-daily quoted prices in active markets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. |
Level 3 | Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
i. | VSOE generally exists only when a company sells a deliverable separately and is the price actually charged by the company for that deliverable. The Company does not sell its deliverables separately and, as such, do not have VSOE. |
ii. | TPE can be substantiated by determining the price that other parties sell similar or substantially similar offerings. The Company does not believe that there is accessible TPE evidence for similar deliverables since there are not comparable deliverables sold by other companies. |
iii. | BESP reflects the Company’s best estimates of what the selling prices of elements would be if they were sold regularly on a stand-alone basis. The Company believes that BESP is the most appropriate methodology for determining the allocation of revenue for its multiple element arrangements. |
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December 31, 2014 | |||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Cash equivalents: | |||||||||||||||
Money market funds | $ | 80,968 | $ | — | $ | — | $ | 80,968 | |||||||
Corporate debt securities | — | 2,000 | — | 2,000 | |||||||||||
Total cash equivalents | $ | 80,968 | $ | 2,000 | $ | — | $ | 82,968 | |||||||
Marketable securities: | |||||||||||||||
U.S. treasury securities | $ | 1,994 | $ | — | $ | — | $ | 1,994 | |||||||
U.S. agency securities | — | 7,020 | — | 7,020 | |||||||||||
Commercial paper | — | 2,497 | — | 2,497 | |||||||||||
Corporate debt securities | — | 90,816 | — | 90,816 | |||||||||||
Total marketable securities | $ | 1,994 | $ | 100,333 | $ | — | $ | 102,327 |
|
December 31, | |||||||
(in thousands) | 2014 | 2013 | |||||
Cash and cash equivalents: | |||||||
Cash | $ | 236,961 | $ | 101,410 | |||
Money market funds | 80,968 | ||||||
Corporate debt securities | 2,000 | — | |||||
Cash and cash equivalents | $ | 319,929 | $ | 101,410 | |||
Marketable securities: | |||||||
Commercial paper | $ | 2,497 | $ | — | |||
U.S. treasury securities | 1,994 | — | |||||
U.S. agency securities | 7,020 | — | |||||
Corporate debt securities | 90,816 | — | |||||
Marketable securities | $ | 102,327 | $ | — |
December 31, | |||||||
(in thousands) | 2014 | 2013 | |||||
Components | $ | 4,324 | $ | 8,000 | |||
Finished goods | 148,702 | 103,994 | |||||
Inventories, net | $ | 153,026 | $ | 111,994 |
December 31, | |||||||
(in thousands) | 2014 | 2013 | |||||
Prepaid income taxes | $ | 26,504 | $ | — | |||
Current deferred tax assets | 24,218 | 15,173 | |||||
Prepaid expenses | 3,905 | 2,739 | |||||
Prepaid licenses | 2,053 | 1,091 | |||||
Deposits | 1,244 | 2,049 | |||||
Other current assets | 5,845 | 915 | |||||
Prepaid expenses and other current assets | $ | 63,769 | $ | 21,967 |
Useful life (in years) | December 31, | ||||||||
(in thousands) | 2014 | 2013 | |||||||
Leasehold improvements | 3–7 | $ | 22,787 | $ | 20,111 | ||||
Computers, software, equipment and furniture | 2–4 | 24,636 | 11,988 | ||||||
Tooling | 1–4 | 16,159 | 8,799 | ||||||
Construction in progress | 3,944 | 2,151 | |||||||
Tradeshow equipment | 2–5 | 2,863 | 2,613 | ||||||
Automobiles | 3–5 | 967 | 856 | ||||||
Gross property and equipment | 71,356 | 46,518 | |||||||
Less: Accumulated depreciation and amortization | (29,800 | ) | (14,407 | ) | |||||
Property and equipment, net | $ | 41,556 | $ | 32,111 |
(In thousands) | |||
Goodwill at December 31, 2012 | $ | 4,233 | |
Acquisition | 9,862 | ||
Goodwill at December 31, 2013 | $ | 14,095 | |
Adjustments | — | ||
Goodwill at December 31, 2014 | $ | 14,095 |
December 31, 2014 | Weighted average remaining useful life (in years) | ||||||||||||
(in thousands) | Gross | Accumulated amortization | Net | ||||||||||
Developed technology | $ | 6,130 | $ | (3,427 | ) | $ | 2,703 | 2.4 | |||||
Tradename | 664 | (509 | ) | 155 | 1.2 | ||||||||
Customer relationships | 170 | (170 | ) | — | 0.0 | ||||||||
Noncompete agreements | 311 | (247 | ) | 64 | 0.8 | ||||||||
Domain name | 15 | — | 15 | ||||||||||
$ | 7,290 | $ | (4,353 | ) | $ | 2,937 |
December 31, 2013 | Weighted average remaining useful life (in years) | ||||||||||||
(in thousands) | Gross | Accumulated amortization | Net | ||||||||||
Developed technology | $ | 5,330 | $ | (2,517 | ) | $ | 2,813 | 3.2 | |||||
Tradename | 664 | (376) | 288 | 2.2 | |||||||||
Customer relationships | 170 | (161) | 9 | 0.2 | |||||||||
Noncompete agreements | 311 | (166) | 145 | 1.8 | |||||||||
Domain name | 15 | — | 15 | ||||||||||
$ | 6,490 | $ | (3,220 | ) | $ | 3,270 |
(in thousands) | Cost of revenue | Operating expenses | Total | ||||||||
Years ending December 31, | |||||||||||
2015 | $ | 888 | $ | 464 | $ | 1,352 | |||||
2016 | 888 | 289 | 1,177 | ||||||||
2017 | 149 | 244 | 393 | ||||||||
$ | 1,925 | $ | 997 | $ | 2,922 |
December 31, | |||||||
(in thousands) | 2014 | 2013 | |||||
POP displays | $ | 18,743 | $ | 22,379 | |||
Long-term deferred tax assets | 8,611 | 736 | |||||
Deposits | 4,706 | 2,698 | |||||
Long-term licenses and other | 4,000 | 4,000 | |||||
Deferred financing charges | — | 947 | |||||
Deferred public offering costs | — | 1,395 | |||||
Other long-term assets | $ | 36,060 | $ | 32,155 |
December 31, | |||||||
(in thousands) | 2014 | 2013 | |||||
Accrued payables | $ | 57,064 | $ | 49,975 | |||
Employee related liabilities | 28,959 | 11,932 | |||||
Accrued sales incentives | 9,635 | 4,909 | |||||
Warranty liability | 6,025 | 3,691 | |||||
Customer deposits | 4,903 | 1,316 | |||||
Sales commissions | 4,254 | 2,454 | |||||
Other | 4,935 | 12,114 | |||||
Accrued liabilities | $ | 115,775 | $ | 86,391 |
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Stock options outstanding | 25,134 | |
Restricted stock units outstanding | 4,307 | |
Stock options, restricted stock and RSUs available for future grants | 12,885 | |
42,326 |
Options outstanding | |||||||||||||||||||||||
(shares in thousands) | Shares available for grant | Shares | Weighted- average exercise price | Weighted- average grant- date fair value | Total intrinsic value of options exercised (in thousands) | Weighted- average remaining contractual term (in years) | Aggregate intrinsic value (in thousands) | ||||||||||||||||
Outstanding at December 31, 2011: | 400 | 26,361 | $ | 0.80 | |||||||||||||||||||
Additional shares authorized | 2,100 | — | — | ||||||||||||||||||||
Granted | (1,418 | ) | 1,418 | 5.10 | $ | 5.02 | |||||||||||||||||
Exercised | — | (2,486) | 1.11 | $ | 30,605 | ||||||||||||||||||
Forfeited/Cancelled | 891 | (891) | 1.43 | ||||||||||||||||||||
Outstanding at December 31, 2012: | 1,973 | 24,402 | $ | 1.00 | 8.33 | $ | 310,454 | ||||||||||||||||
Additional shares authorized | 2,000 | ||||||||||||||||||||||
Granted | (2,906) | 2,906 | 15.14 | $ | 8.45 | ||||||||||||||||||
Exercised | — | (345) | 2.23 | $ | 4,564 | ||||||||||||||||||
Forfeited/Cancelled | 239 | (239) | 6.31 | ||||||||||||||||||||
Outstanding at December 31, 2013: | 1,306 | 26,724 | $ | 2.47 | 7.55 | $ | 367,395 | ||||||||||||||||
Additional shares authorized | 21,970 | — | — | ||||||||||||||||||||
Granted | (5,208 | ) | 5,208 | 21.68 | $ | 11.51 | |||||||||||||||||
RSUs granted | (5,573 | ) | — | — | |||||||||||||||||||
Exercised | — | (6,419 | ) | 1.24 | $ | 253,332 | |||||||||||||||||
Forfeited/Cancelled | 390 | (379 | ) | 12.11 | |||||||||||||||||||
Outstanding at December 31, 2014: | 12,885 | 25,134 | $ | 6.62 | 7.09 | $ | 1,425,339 | ||||||||||||||||
Exercisable at December 31, 2014 | 17,971 | $ | 2.00 | 6.37 | $ | 1,100,208 | |||||||||||||||||
Vested and expected to vest at December 31, 2014 | 24,743 | $ | 6.43 | 7.06 | $ | 1,407,823 |
Options outstanding | Options exercisable | |||||||||||||
(shares in thousands) | Shares outstanding | Weighted- average remaining contractual life (in years) | Weighted- average exercise price | Shares exercisable | Weighted- average exercise price | |||||||||
Range of exercise prices | ||||||||||||||
$ 0.18–0.66 | 7,696 | 5.75 | $ | 0.62 | 7,696 | $ | 0.62 | |||||||
0.76–0.76 | 7,769 | 6.46 | 0.76 | 7,572 | 0.76 | |||||||||
1.52–2.96 | 1,606 | 7.01 | 1.91 | 1,119 | 1.86 | |||||||||
8.30–8.30 | 462 | 7.70 | 8.30 | 244 | 8.30 | |||||||||
13.72–15.59 | 1,771 | 8.36 | 14.68 | 687 | 14.61 | |||||||||
16.19–16.39 | 2,466 | 9.06 | 16.26 | 368 | 16.21 | |||||||||
18.40–18.40 | 2,793 | 9.42 | 18.40 | 285 | 18.40 | |||||||||
38.84–81.50 | 571 | 9.65 | 54.90 | — | — | |||||||||
$ 0.18–81.50 | 25,134 | 7.09 | $ | 6.62 | 17,971 | $ | 2.00 |
(in thousands except for weighted average grant date fair value) | Shares | Weighted- average grant date fair value | Aggregate intrinsic value | ||||||
Non-vested shares at December 31, 2011 | 644 | $ | 2.44 | $ | 711 | ||||
Vested | (212) | ||||||||
Non-vested shares at December 31, 2012 | 432 | 2.44 | 5,274 | ||||||
Granted | 430 | 16.19 | 6,962 | ||||||
Vested | (375) | ||||||||
Non-vested shares at December 31, 2013 | 487 | 11.03 | 7,628 | ||||||
Vested | (470) | ||||||||
Non-vested shares at December 31, 2014 | 17 | $ | 6.30 | $ | 1,017 |
(in thousands except for weighted average grant date fair value) | Shares | Weighted- average grant date fair value | ||||
Non-vested shares at December 31, 2013 and 2012 | 270 | $ | 1.52 | |||
Granted | 5,573 | $ | 22.01 | |||
Vested | (1,533 | ) | $ | 18.42 | ||
Forfeited | (3 | ) | $ | 57.73 | ||
Non-vested shares at December 31, 2014 | 4,307 | $ | 21.98 |
Years ended December 31, | |||||
2014 | 2013 | 2012 | |||
Volatility | 54%–56% | 56%–60% | 56%–60% | ||
Expected term (years) | 5.3–6.3 | 5.3–6.1 | 5.1–6.1 | ||
Risk-free interest rate | 1.7%–2.0% | 0.8%–2.4% | 0.8%–2.4% | ||
Dividend yield | —% | —% | —% | ||
Expected forfeiture rate | 4%–6% | 6% | 5%-7% | ||
Weighted average fair value | $11.51 | $8.45 | $5.08 |
Expected volatility | 50.9% |
Expected term (years) | 10 |
Risk-free interest rate | 2.69% |
Dividend yield | —% |
Grant date fair value of underlying shares | $18.40 |
Volatility | 45.5% |
Expected term (years) | 0.6 |
Risk-free interest rate | 0.1% |
Dividend yield | —% |
Expected forfeiture rate | 4%-6% |
Years ended December 31, | |||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||
Stock-based compensation expense by type of award | |||||||||||
Stock options | $ | 17,450 | $ | 8,468 | $ | 8,165 | |||||
RSUs | 41,412 | — | — | ||||||||
RSAs | 10,833 | 2,419 | 991 | ||||||||
ESPP | 1,704 | — | — | ||||||||
Total stock-based compensation expense | $ | 71,399 | $ | 10,887 | $ | 9,156 |
Years ended December 31, | |||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||
Cost of revenue | $ | 835 | $ | 690 | $ | 333 | |||||
Research and development | 11,640 | 3,003 | 1,452 | ||||||||
Sales and marketing | 10,428 | 5,670 | 6,335 | ||||||||
General and administrative | 48,496 | 1,524 | 1,036 | ||||||||
Total stock-based compensation expense | 71,399 | 10,887 | 9,156 | ||||||||
Total tax benefit recognized | (19,471) | (1,104) | (1,091) | ||||||||
Decrease in net income | $ | 51,928 | $ | 9,783 | $ | 8,065 |
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Years ended December 31, | |||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||
Domestic | $ | 114,937 | $ | 57,251 | $ | 38,714 | |||||
Foreign | 66,038 | 34,078 | 14,496 | ||||||||
$ | 180,975 | $ | 91,329 | $ | 53,210 |
Years ended December 31, | |||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||
Current: | |||||||||||
Federal | $ | 55,846 | $ | 28,856 | $ | 19,984 | |||||
State | 6,075 | 1,634 | (493) | ||||||||
Foreign | 8,219 | 8,058 | 3,578 | ||||||||
Total current | 70,140 | 38,548 | 23,069 | ||||||||
Deferred: | |||||||||||
Federal | (13,551 | ) | (7,268) | (2,247) | |||||||
State | (3,369 | ) | (861) | 126 | |||||||
Foreign | (333 | ) | 332 | — | |||||||
Total deferred | (17,253 | ) | (7,797) | (2,121) | |||||||
Income tax expense | $ | 52,887 | $ | 30,751 | $ | 20,948 |
Years ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
(in thousands, except percentage) | $ | % | $ | % | $ | % | |||||||||||
Reconciliation to statutory rate: | |||||||||||||||||
Tax at federal statutory rate | $ | 63,341 | 35.0 | % | $ | 31,965 | 35.0 | % | $ | 18,623 | 35.0 | % | |||||
State taxes, net of federal benefit | 4,911 | 2.7 | 2,344 | 2.6 | 1,384 | 2.6 | |||||||||||
Impact of foreign operations | (13,305 | ) | (7.4 | ) | (113 | ) | (0.1 | ) | (211 | ) | (0.4 | ) | |||||
Stock-based compensation | 8,050 | 4.4 | 2,982 | 3.3 | 1,385 | 2.6 | |||||||||||
Tax credits | (10,616 | ) | (5.9 | ) | (5,637 | ) | (6.2 | ) | (415 | ) | (0.8 | ) | |||||
Other | 506 | 0.4 | (790 | ) | (0.9 | ) | 182 | 0.4 | |||||||||
$ | 52,887 | 29.2 | % | $ | 30,751 | 33.7 | % | $ | 20,948 | 39.4 | % |
December 31, | |||||||
(in thousands) | 2014 | 2013 | |||||
Components of deferred tax assets and liabilities | |||||||
Deferred tax assets: | |||||||
Net operating loss carryforwards | $ | — | $ | 252 | |||
Tax credit carryforwards | 2,347 | — | |||||
Stock-based compensation | 9,950 | 3,475 | |||||
Accruals and reserves | 23,950 | 15,463 | |||||
Total deferred tax assets | $ | 36,247 | $ | 19,190 | |||
Deferred tax liabilities: | |||||||
Depreciation and amortization | $ | (3,418 | ) | $ | (3,063 | ) | |
Intangible assets | — | (550 | ) | ||||
Total deferred tax liabilities | (3,418 | ) | (3,613 | ) | |||
Net deferred tax assets | $ | 32,829 | $ | 15,577 |
December 31, | |||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||
Gross balance at January 1 | $ | 9,898 | $ | 4,439 | $ | 966 | |||||
Gross increase related to current year tax positions | 6,401 | 5,280 | 3,473 | ||||||||
Gross increase related to prior year tax positions | 259 | 179 | — | ||||||||
$ | 16,558 | $ | 9,898 | $ | 4,439 |
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(in thousands) | Total | 1 year (fiscal 2015) | 2-3 years (fiscal 2016 and 2017 | 4-5 years (fiscal 2018 and 2019) | More than 5 years (beyond fiscal 2019) | ||||||||||||||
Operating leases(1) | $ | 37,557 | $ | 9,698 | $ | 18,644 | $ | 9,215 | $ | — | |||||||||
Sponsorship commitments(2) | 13,858 | 8,743 | 5,115 | — | — | ||||||||||||||
Other contractual commitments(3) | 7,395 | 2,899 | 4,496 | — | — | ||||||||||||||
Capital equipment purchase commitments(4) | 16,021 | 16,021 | — | — | — | ||||||||||||||
Total contractual cash obligations | $ | 74,831 | $ | 37,361 | $ | 28,255 | $ | 9,215 | $ | — |
(1) | The Company leases its facilities under long-term operating leases, which expire at various dates through May 2019. The lease agreements frequently include leasehold improvement incentives, escalating lease payments, renewal provisions and other provisions which require the Company to pay taxes, insurance, maintenance costs or defined rent increases. |
(2) | The Company sponsors sporting events, resorts and athletes as part of its marketing efforts. In many cases, the Company enters into multi-year agreements with event organizers, resorts and athletes. |
(3) | In 2013, the Company purchased software licenses and engaged outside consultants to assist with upgrading or implementing its financial and IT systems, which require payments over multiple years. |
(4) | The Company enters into contracts to acquire equipment for tooling and molds as part of its manufacturing operations. In addition, the Company incurs purchase commitments related to the manufacturing of its POP displays by third parties. |
Years ended December 31, | |||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||
Beginning balances | $ | 3,870 | $ | 1,937 | $ | 589 | |||||
Charged to cost of revenue | 10,268 | 7,380 | 2,821 | ||||||||
Settlements of warranty claims | (7,733) | (5,447) | (1,473) | ||||||||
Ending balances | $ | 6,405 | $ | 3,870 | $ | 1,937 |
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Years ended December 31, | |||||
2014 | 2013 | ||||
A (distributor) | 17 | % | 14 | % | |
B (retailer) | 14 | % | * | ||
C (retailer) | 11 | % | 11 | % | |
D (retailer) | * | 21 | % |
Years ended December 31, | ||||||||
2014 | 2013 | 2012 | ||||||
A (retailer) | 20 | % | 17 | % | 15 | % |
* | Less than 10% of total revenue for the period indicated |
Year ended December 31, | |||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||
Americas | $ | 890,352 | $ | 557,285 | $ | 314,135 | |||||
Europe, Middle East and Africa (EMEA) | 371,197 | 322,226 | 161,193 | ||||||||
Asia and Pacific area countries (APAC) | 132,656 | 106,226 | 50,688 | ||||||||
$ | 1,394,205 | $ | 985,737 | $ | 526,016 |
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(in thousands) | Estimated useful life (in years) | Purchase price | |||
Purchased intangible asset: | |||||
Noncompete agreements | 2 | $ | 161 | ||
Goodwill (non-tax deductible) | 9,862 | ||||
Other assets and liabilities acquired, net of cash | 84 | ||||
Total assets acquired | $ | 10,107 |
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Level 1 | Valuations based on quoted prices in active markets for identical assets or liabilities that the Company has the ability to directly access. |
Level 2 | Valuations based on quoted prices for similar assets or liabilities; valuations for interest-bearing securities based on non-daily quoted prices in active markets; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. |
Level 3 | Valuations based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
i. | VSOE generally exists only when a company sells a deliverable separately and is the price actually charged by the company for that deliverable. The Company does not sell its deliverables separately and, as such, do not have VSOE. |
ii. | TPE can be substantiated by determining the price that other parties sell similar or substantially similar offerings. The Company does not believe that there is accessible TPE evidence for similar deliverables since there are not comparable deliverables sold by other companies. |
iii. | BESP reflects the Company’s best estimates of what the selling prices of elements would be if they were sold regularly on a stand-alone basis. The Company believes that BESP is the most appropriate methodology for determining the allocation of revenue for its multiple element arrangements. |
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December 31, 2014 | |||||||||||||||
(in thousands) | Level 1 | Level 2 | Level 3 | Total | |||||||||||
Cash equivalents: | |||||||||||||||
Money market funds | $ | 80,968 | $ | — | $ | — | $ | 80,968 | |||||||
Corporate debt securities | — | 2,000 | — | 2,000 | |||||||||||
Total cash equivalents | $ | 80,968 | $ | 2,000 | $ | — | $ | 82,968 | |||||||
Marketable securities: | |||||||||||||||
U.S. treasury securities | $ | 1,994 | $ | — | $ | — | $ | 1,994 | |||||||
U.S. agency securities | — | 7,020 | — | 7,020 | |||||||||||
Commercial paper | — | 2,497 | — | 2,497 | |||||||||||
Corporate debt securities | — | 90,816 | — | 90,816 | |||||||||||
Total marketable securities | $ | 1,994 | $ | 100,333 | $ | — | $ | 102,327 |
|
December 31, | |||||||
(in thousands) | 2014 | 2013 | |||||
Cash and cash equivalents: | |||||||
Cash | $ | 236,961 | $ | 101,410 | |||
Money market funds | 80,968 | ||||||
Corporate debt securities | 2,000 | — | |||||
Cash and cash equivalents | $ | 319,929 | $ | 101,410 | |||
Marketable securities: | |||||||
Commercial paper | $ | 2,497 | $ | — | |||
U.S. treasury securities | 1,994 | — | |||||
U.S. agency securities | 7,020 | — | |||||
Corporate debt securities | 90,816 | — | |||||
Marketable securities | $ | 102,327 | $ | — |
December 31, | |||||||
(in thousands) | 2014 | 2013 | |||||
Components | $ | 4,324 | $ | 8,000 | |||
Finished goods | 148,702 | 103,994 | |||||
Inventories, net | $ | 153,026 | $ | 111,994 |
December 31, | |||||||
(in thousands) | 2014 | 2013 | |||||
Prepaid income taxes | $ | 26,504 | $ | — | |||
Current deferred tax assets | 24,218 | 15,173 | |||||
Prepaid expenses | 3,905 | 2,739 | |||||
Prepaid licenses | 2,053 | 1,091 | |||||
Deposits | 1,244 | 2,049 | |||||
Other current assets | 5,845 | 915 | |||||
Prepaid expenses and other current assets | $ | 63,769 | $ | 21,967 |
Useful life (in years) | December 31, | ||||||||
(in thousands) | 2014 | 2013 | |||||||
Leasehold improvements | 3–7 | $ | 22,787 | $ | 20,111 | ||||
Computers, software, equipment and furniture | 2–4 | 24,636 | 11,988 | ||||||
Tooling | 1–4 | 16,159 | 8,799 | ||||||
Construction in progress | 3,944 | 2,151 | |||||||
Tradeshow equipment | 2–5 | 2,863 | 2,613 | ||||||
Automobiles | 3–5 | 967 | 856 | ||||||
Gross property and equipment | 71,356 | 46,518 | |||||||
Less: Accumulated depreciation and amortization | (29,800 | ) | (14,407 | ) | |||||
Property and equipment, net | $ | 41,556 | $ | 32,111 |
(In thousands) | |||
Goodwill at December 31, 2012 | $ | 4,233 | |
Acquisition | 9,862 | ||
Goodwill at December 31, 2013 | $ | 14,095 | |
Adjustments | — | ||
Goodwill at December 31, 2014 | $ | 14,095 |
December 31, 2014 | Weighted average remaining useful life (in years) | ||||||||||||
(in thousands) | Gross | Accumulated amortization | Net | ||||||||||
Developed technology | $ | 6,130 | $ | (3,427 | ) | $ | 2,703 | 2.4 | |||||
Tradename | 664 | (509 | ) | 155 | 1.2 | ||||||||
Customer relationships | 170 | (170 | ) | — | 0.0 | ||||||||
Noncompete agreements | 311 | (247 | ) | 64 | 0.8 | ||||||||
Domain name | 15 | — | 15 | ||||||||||
$ | 7,290 | $ | (4,353 | ) | $ | 2,937 |
December 31, 2013 | Weighted average remaining useful life (in years) | ||||||||||||
(in thousands) | Gross | Accumulated amortization | Net | ||||||||||
Developed technology | $ | 5,330 | $ | (2,517 | ) | $ | 2,813 | 3.2 | |||||
Tradename | 664 | (376) | 288 | 2.2 | |||||||||
Customer relationships | 170 | (161) | 9 | 0.2 | |||||||||
Noncompete agreements | 311 | (166) | 145 | 1.8 | |||||||||
Domain name | 15 | — | 15 | ||||||||||
$ | 6,490 | $ | (3,220 | ) | $ | 3,270 |
(in thousands) | Cost of revenue | Operating expenses | Total | ||||||||
Years ending December 31, | |||||||||||
2015 | $ | 888 | $ | 464 | $ | 1,352 | |||||
2016 | 888 | 289 | 1,177 | ||||||||
2017 | 149 | 244 | 393 | ||||||||
$ | 1,925 | $ | 997 | $ | 2,922 |
December 31, | |||||||
(in thousands) | 2014 | 2013 | |||||
POP displays | $ | 18,743 | $ | 22,379 | |||
Long-term deferred tax assets | 8,611 | 736 | |||||
Deposits | 4,706 | 2,698 | |||||
Long-term licenses and other | 4,000 | 4,000 | |||||
Deferred financing charges | — | 947 | |||||
Deferred public offering costs | — | 1,395 | |||||
Other long-term assets | $ | 36,060 | $ | 32,155 |
December 31, | |||||||
(in thousands) | 2014 | 2013 | |||||
Accrued payables | $ | 57,064 | $ | 49,975 | |||
Employee related liabilities | 28,959 | 11,932 | |||||
Accrued sales incentives | 9,635 | 4,909 | |||||
Warranty liability | 6,025 | 3,691 | |||||
Customer deposits | 4,903 | 1,316 | |||||
Sales commissions | 4,254 | 2,454 | |||||
Other | 4,935 | 12,114 | |||||
Accrued liabilities | $ | 115,775 | $ | 86,391 |
|
Stock options outstanding | 25,134 | |
Restricted stock units outstanding | 4,307 | |
Stock options, restricted stock and RSUs available for future grants | 12,885 | |
42,326 |
Options outstanding | |||||||||||||||||||||||
(shares in thousands) | Shares available for grant | Shares | Weighted- average exercise price | Weighted- average grant- date fair value | Total intrinsic value of options exercised (in thousands) | Weighted- average remaining contractual term (in years) | Aggregate intrinsic value (in thousands) | ||||||||||||||||
Outstanding at December 31, 2011: | 400 | 26,361 | $ | 0.80 | |||||||||||||||||||
Additional shares authorized | 2,100 | — | — | ||||||||||||||||||||
Granted | (1,418 | ) | 1,418 | 5.10 | $ | 5.02 | |||||||||||||||||
Exercised | — | (2,486) | 1.11 | $ | 30,605 | ||||||||||||||||||
Forfeited/Cancelled | 891 | (891) | 1.43 | ||||||||||||||||||||
Outstanding at December 31, 2012: | 1,973 | 24,402 | $ | 1.00 | 8.33 | $ | 310,454 | ||||||||||||||||
Additional shares authorized | 2,000 | ||||||||||||||||||||||
Granted | (2,906) | 2,906 | 15.14 | $ | 8.45 | ||||||||||||||||||
Exercised | — | (345) | 2.23 | $ | 4,564 | ||||||||||||||||||
Forfeited/Cancelled | 239 | (239) | 6.31 | ||||||||||||||||||||
Outstanding at December 31, 2013: | 1,306 | 26,724 | $ | 2.47 | 7.55 | $ | 367,395 | ||||||||||||||||
Additional shares authorized | 21,970 | — | — | ||||||||||||||||||||
Granted | (5,208 | ) | 5,208 | 21.68 | $ | 11.51 | |||||||||||||||||
RSUs granted | (5,573 | ) | — | — | |||||||||||||||||||
Exercised | — | (6,419 | ) | 1.24 | $ | 253,332 | |||||||||||||||||
Forfeited/Cancelled | 390 | (379 | ) | 12.11 | |||||||||||||||||||
Outstanding at December 31, 2014: | 12,885 | 25,134 | $ | 6.62 | 7.09 | $ | 1,425,339 | ||||||||||||||||
Exercisable at December 31, 2014 | 17,971 | $ | 2.00 | 6.37 | $ | 1,100,208 | |||||||||||||||||
Vested and expected to vest at December 31, 2014 | 24,743 | $ | 6.43 | 7.06 | $ | 1,407,823 |
Options outstanding | Options exercisable | |||||||||||||
(shares in thousands) | Shares outstanding | Weighted- average remaining contractual life (in years) | Weighted- average exercise price | Shares exercisable | Weighted- average exercise price | |||||||||
Range of exercise prices | ||||||||||||||
$ 0.18–0.66 | 7,696 | 5.75 | $ | 0.62 | 7,696 | $ | 0.62 | |||||||
0.76–0.76 | 7,769 | 6.46 | 0.76 | 7,572 | 0.76 | |||||||||
1.52–2.96 | 1,606 | 7.01 | 1.91 | 1,119 | 1.86 | |||||||||
8.30–8.30 | 462 | 7.70 | 8.30 | 244 | 8.30 | |||||||||
13.72–15.59 | 1,771 | 8.36 | 14.68 | 687 | 14.61 | |||||||||
16.19–16.39 | 2,466 | 9.06 | 16.26 | 368 | 16.21 | |||||||||
18.40–18.40 | 2,793 | 9.42 | 18.40 | 285 | 18.40 | |||||||||
38.84–81.50 | 571 | 9.65 | 54.90 | — | — | |||||||||
$ 0.18–81.50 | 25,134 | 7.09 | $ | 6.62 | 17,971 | $ | 2.00 |
(in thousands except for weighted average grant date fair value) | Shares | Weighted- average grant date fair value | Aggregate intrinsic value | ||||||
Non-vested shares at December 31, 2011 | 644 | $ | 2.44 | $ | 711 | ||||
Vested | (212) | ||||||||
Non-vested shares at December 31, 2012 | 432 | 2.44 | 5,274 | ||||||
Granted | 430 | 16.19 | 6,962 | ||||||
Vested | (375) | ||||||||
Non-vested shares at December 31, 2013 | 487 | 11.03 | 7,628 | ||||||
Vested | (470) | ||||||||
Non-vested shares at December 31, 2014 | 17 | $ | 6.30 | $ | 1,017 |
(in thousands except for weighted average grant date fair value) | Shares | Weighted- average grant date fair value | ||||
Non-vested shares at December 31, 2013 and 2012 | 270 | $ | 1.52 | |||
Granted | 5,573 | $ | 22.01 | |||
Vested | (1,533 | ) | $ | 18.42 | ||
Forfeited | (3 | ) | $ | 57.73 | ||
Non-vested shares at December 31, 2014 | 4,307 | $ | 21.98 |
Years ended December 31, | |||||
2014 | 2013 | 2012 | |||
Volatility | 54%–56% | 56%–60% | 56%–60% | ||
Expected term (years) | 5.3–6.3 | 5.3–6.1 | 5.1–6.1 | ||
Risk-free interest rate | 1.7%–2.0% | 0.8%–2.4% | 0.8%–2.4% | ||
Dividend yield | —% | —% | —% | ||
Expected forfeiture rate | 4%–6% | 6% | 5%-7% | ||
Weighted average fair value | $11.51 | $8.45 | $5.08 |
Expected volatility | 50.9% |
Expected term (years) | 10 |
Risk-free interest rate | 2.69% |
Dividend yield | —% |
Grant date fair value of underlying shares | $18.40 |
Volatility | 45.5% |
Expected term (years) | 0.6 |
Risk-free interest rate | 0.1% |
Dividend yield | —% |
Expected forfeiture rate | 4%-6% |
Years ended December 31, | |||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||
Stock-based compensation expense by type of award | |||||||||||
Stock options | $ | 17,450 | $ | 8,468 | $ | 8,165 | |||||
RSUs | 41,412 | — | — | ||||||||
RSAs | 10,833 | 2,419 | 991 | ||||||||
ESPP | 1,704 | — | — | ||||||||
Total stock-based compensation expense | $ | 71,399 | $ | 10,887 | $ | 9,156 |
Years ended December 31, | |||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||
Cost of revenue | $ | 835 | $ | 690 | $ | 333 | |||||
Research and development | 11,640 | 3,003 | 1,452 | ||||||||
Sales and marketing | 10,428 | 5,670 | 6,335 | ||||||||
General and administrative | 48,496 | 1,524 | 1,036 | ||||||||
Total stock-based compensation expense | 71,399 | 10,887 | 9,156 | ||||||||
Total tax benefit recognized | (19,471) | (1,104) | (1,091) | ||||||||
Decrease in net income | $ | 51,928 | $ | 9,783 | $ | 8,065 |
|
Years ended December 31, | |||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||
Domestic | $ | 114,937 | $ | 57,251 | $ | 38,714 | |||||
Foreign | 66,038 | 34,078 | 14,496 | ||||||||
$ | 180,975 | $ | 91,329 | $ | 53,210 |
Years ended December 31, | |||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||
Current: | |||||||||||
Federal | $ | 55,846 | $ | 28,856 | $ | 19,984 | |||||
State | 6,075 | 1,634 | (493) | ||||||||
Foreign | 8,219 | 8,058 | 3,578 | ||||||||
Total current | 70,140 | 38,548 | 23,069 | ||||||||
Deferred: | |||||||||||
Federal | (13,551 | ) | (7,268) | (2,247) | |||||||
State | (3,369 | ) | (861) | 126 | |||||||
Foreign | (333 | ) | 332 | — | |||||||
Total deferred | (17,253 | ) | (7,797) | (2,121) | |||||||
Income tax expense | $ | 52,887 | $ | 30,751 | $ | 20,948 |
Years ended December 31, | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
(in thousands, except percentage) | $ | % | $ | % | $ | % | |||||||||||
Reconciliation to statutory rate: | |||||||||||||||||
Tax at federal statutory rate | $ | 63,341 | 35.0 | % | $ | 31,965 | 35.0 | % | $ | 18,623 | 35.0 | % | |||||
State taxes, net of federal benefit | 4,911 | 2.7 | 2,344 | 2.6 | 1,384 | 2.6 | |||||||||||
Impact of foreign operations | (13,305 | ) | (7.4 | ) | (113 | ) | (0.1 | ) | (211 | ) | (0.4 | ) | |||||
Stock-based compensation | 8,050 | 4.4 | 2,982 | 3.3 | 1,385 | 2.6 | |||||||||||
Tax credits | (10,616 | ) | (5.9 | ) | (5,637 | ) | (6.2 | ) | (415 | ) | (0.8 | ) | |||||
Other | 506 | 0.4 | (790 | ) | (0.9 | ) | 182 | 0.4 | |||||||||
$ | 52,887 | 29.2 | % | $ | 30,751 | 33.7 | % | $ | 20,948 | 39.4 | % |
December 31, | |||||||
(in thousands) | 2014 | 2013 | |||||
Components of deferred tax assets and liabilities | |||||||
Deferred tax assets: | |||||||
Net operating loss carryforwards | $ | — | $ | 252 | |||
Tax credit carryforwards | 2,347 | — | |||||
Stock-based compensation | 9,950 | 3,475 | |||||
Accruals and reserves | 23,950 | 15,463 | |||||
Total deferred tax assets | $ | 36,247 | $ | 19,190 | |||
Deferred tax liabilities: | |||||||
Depreciation and amortization | $ | (3,418 | ) | $ | (3,063 | ) | |
Intangible assets | — | (550 | ) | ||||
Total deferred tax liabilities | (3,418 | ) | (3,613 | ) | |||
Net deferred tax assets | $ | 32,829 | $ | 15,577 |
December 31, | |||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||
Gross balance at January 1 | $ | 9,898 | $ | 4,439 | $ | 966 | |||||
Gross increase related to current year tax positions | 6,401 | 5,280 | 3,473 | ||||||||
Gross increase related to prior year tax positions | 259 | 179 | — | ||||||||
$ | 16,558 | $ | 9,898 | $ | 4,439 |
|
(in thousands) | Total | 1 year (fiscal 2015) | 2-3 years (fiscal 2016 and 2017 | 4-5 years (fiscal 2018 and 2019) | More than 5 years (beyond fiscal 2019) | ||||||||||||||
Operating leases(1) | $ | 37,557 | $ | 9,698 | $ | 18,644 | $ | 9,215 | $ | — | |||||||||
Sponsorship commitments(2) | 13,858 | 8,743 | 5,115 | — | — | ||||||||||||||
Other contractual commitments(3) | 7,395 | 2,899 | 4,496 | — | — | ||||||||||||||
Capital equipment purchase commitments(4) | 16,021 | 16,021 | — | — | — | ||||||||||||||
Total contractual cash obligations | $ | 74,831 | $ | 37,361 | $ | 28,255 | $ | 9,215 | $ | — |
(1) | The Company leases its facilities under long-term operating leases, which expire at various dates through May 2019. The lease agreements frequently include leasehold improvement incentives, escalating lease payments, renewal provisions and other provisions which require the Company to pay taxes, insurance, maintenance costs or defined rent increases. |
(2) | The Company sponsors sporting events, resorts and athletes as part of its marketing efforts. In many cases, the Company enters into multi-year agreements with event organizers, resorts and athletes. |
(3) | In 2013, the Company purchased software licenses and engaged outside consultants to assist with upgrading or implementing its financial and IT systems, which require payments over multiple years. |
(4) | The Company enters into contracts to acquire equipment for tooling and molds as part of its manufacturing operations. In addition, the Company incurs purchase commitments related to the manufacturing of its POP displays by third parties. |
Years ended December 31, | |||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||
Beginning balances | $ | 3,870 | $ | 1,937 | $ | 589 | |||||
Charged to cost of revenue | 10,268 | 7,380 | 2,821 | ||||||||
Settlements of warranty claims | (7,733) | (5,447) | (1,473) | ||||||||
Ending balances | $ | 6,405 | $ | 3,870 | $ | 1,937 |
|
Years ended December 31, | ||||||||
2014 | 2013 | 2012 | ||||||
A (retailer) | 20 | % | 17 | % | 15 | % |
* | Less than 10% of total revenue for the period indicated |
Years ended December 31, | |||||
2014 | 2013 | ||||
A (distributor) | 17 | % | 14 | % | |
B (retailer) | 14 | % | * | ||
C (retailer) | 11 | % | 11 | % | |
D (retailer) | * | 21 | % |
Year ended December 31, | |||||||||||
(in thousands) | 2014 | 2013 | 2012 | ||||||||
Americas | $ | 890,352 | $ | 557,285 | $ | 314,135 | |||||
Europe, Middle East and Africa (EMEA) | 371,197 | 322,226 | 161,193 | ||||||||
Asia and Pacific area countries (APAC) | 132,656 | 106,226 | 50,688 | ||||||||
$ | 1,394,205 | $ | 985,737 | $ | 526,016 |
|
(in thousands) | Estimated useful life (in years) | Purchase price | |||
Purchased intangible asset: | |||||
Noncompete agreements | 2 | $ | 161 | ||
Goodwill (non-tax deductible) | 9,862 | ||||
Other assets and liabilities acquired, net of cash | 84 | ||||
Total assets acquired | $ | 10,107 |
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